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Landowner Decisions: More Important Than Ever
You are here:   Blog  »  Agricultural Real Estate  »  Landowner Decisions: More Important Than Ever

May 9, 2022  

Non-operating landowners own almost 40% of the agricultural land across the United States. In some regions, a much higher percentage of land is owned and leased out by the non-operators. This group is vitally important for farmers and ranchers who lease the land and produce the food and fiber that sustains the world. Today, landowners, both active farmers, and ranchers, along with the non-operating owners, are faced with a multitude of decision points. Some are financial and some are conservation-focused.  Some remain the same throughout the years and some are new today. 

  

Each generation of landowners, active producers, and passive owners alike, face decisions about succession. As agricultural land transfers to the next generation, we see more individuals involved in ownership and decision-making. Planning for succession and the decisions made are becoming more critical with the increased value of the underlying asset and the growing importance of food and fiber production for the world's population. Legacy and financial reasons come into play for each generation of landowners as they decide whether to keep the farm, who will farm it, and if they should sell.    

  

Landowners are now being faced with a new set of challenges and opportunities that create another set of decisions to be made with short-term and long-term ramifications.  Long-term questions for a landowner include whether to enroll in carbon sequestration programs, try organic production or other alternatives to conventional crops, utilize alternative ownership methods such as REITs or financialized partnerships to own land, and because of the high land prices, whether to sell today. Short-term decisions to be faced include, being able to secure the inputs to produce a crop and maintain the soil, how to adjust lease terms to respond to the current commodity markets, and how to utilize new technology on the farm for profit, and conservation benefits.  

  

Just like producers, non-operating landowners are facing important decision points around the land they own. How the farm is owned, how it is operated, how to balance short-term change with long-term benefits, and ultimately, how to leave a better farm to the next generation or the next owner are a few of the decision points. Challenges abound as always, but new opportunities are available.    


Randy Dickhut  

Senior Vice President - Real Estate Operations 

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